Factors that affect positively or negatively to the economic development
of China.

Communications Historically communcations systems have been limited
when compared to the western world. Only recently, China has made great
investments in their communications network. Not only was China’s communcations
systems limited within its borders, but there was also a lack of communcation
outside of its borders due to governmental policies which prevented trade.
This includes both media and infrastructure. Now that the communications
systems are expanding, it means that it will be easier for the western
style of business to cope. Although it may be considered to be a weakness
now, it also means that there is a great opportunity for supplying and
installing communcations networks by Finnish firms. It is important to
note that today, there is no problem for businesses to obtain modern telecommunications
equipment including telephone, fax, internet access, cellular phones and
paging systems. China has some of the most sophisticated satelite technology
available to them for improved clarity, ease of operation, and economical
world access.

Trade routes China has an extensive system of inland waterways, paved
roads and airports to serve the needs of business passengers and cargo.
18 sea ports provide access to the major economic zones making the transport
of large or bulky items relatively easy. A large number of airprots make
travel between major cites convenient as well as the transport of goods
in and out. Weaknesses in transportation become most obvious when trying
to get through the cities. The narrow streets and unbelievable congestion
make movement difficult, if not impossible. This makes it difficult to
meet suppliers and customers face to face.

Taxes, duties, paperwork, regulation Regulatory controls in China are
not as stringent or complicated as most western countries, however, Chinese
administration and buerocracy tends to work very slowly. A business licence
may only cost US$ 1,000 but could take up to six months to obtain. This
must also be renewed on a regular basis.

Language is not usually considered to be a problem. Chinese who are
involved in international business either speak English, or are accustomed
to using translators. Successfully established foreign businesses usually
hire a compliment of local Chinese staff to conduct the daily affairs of
the business. This also helps to break down the barriers between foreign
companies and the Chinese businessmen.

Chinese hate “visitors.” Companies who show that they are there to stay
are much better accepted. If a company establishes an office in China,
the managing director willl likely be asked how long he intends to stay.
Companies with permanent offices and permanent employees had a much better
negotiating position than those who are in a “hurry.” Foreign companies
who establish themselves in China will often lose patience with their ablility
to earn profits in the short term. Historically, successful businesses
will be established in China for five or even ten years before realizing
a profit.

Threats & Opportunities The Chinese government is very stable, but
it is now going through some fundamental changes in the way it views trade
outside of its borders. Traditionally, the Communist government was concerned
with preserving its centrally planned “Soviet-style” economy. The change
in approach to the ecomomy has caused unexpected aborations in the financial
indicators. Rapid industrial growth has caused a huge increase in inflation
domestically. Other factors have required the government to work toward
keeping large state-owned enterprises afloat as they have not keep pace
with the technology and tremendous expansion of others. The government
continues to control and reduce extortion and other economic crimes.

China still has boundary disputes with some of its major trading partners
including Russia, North Korea and Japan. If these erupted into some military
movement, the consequences to foreign businesses could be very difficult
to predict.

The biggest threat to foreign businesses in China is the potential for
certain markets to be regulated, taxed or even closed out. With huge increases
in growth to cities and major industrial zones, the country will have to
take measures to control the amount of polution and possibly consumption
of vital resources like power and water. It is conceivable that some corporations
have moved into China to take advantage of a lack of polution controls.
For some industries, this can mean much cheaper operating expenses. If
the Chinese government imposes new regulations after the investment of
capital has been made, it could suddenly make the venture unprofitable
and unrealizable.

Implementation of stiffer polution standards can also mean great opportunities
for companies who specialize in this. Regulations of smokestack emmisions
will create a need for scrubbers to be installed and maintained. Regulations
on dumping waste will lead to waste management consultants, processing
and safe disposal. You can see how a small government regulation could
lead to a huge opportunity for a company ready to take on the challenge.

The implementation of advanced taxation systems can also contribute
to unrest and ill feelings toward the Chinese government after considerable
capital investments have been made. This maybe partly from the federal
government or from provincial and local governments. Taxation by the government
may be introduced to reduce competition for state owned corporations, or
it may just be implemented to provide for infrastructure improvements.

Any company or businessman who is familiar with trade with Russia, will
have an advantage in trying to establish trade ties with China. The nature
of business is similar because of the Communist regeims who have controlled
industry and trade in the past. The approach of patience, investment and
permanence will go a long way toward developing good relations and opportunities
for profit in the long run. To enter a market which has 1.2 billion consumers
means that the opportunities are endless. No matter how big competition
seems to be, there is a market which is still untapped. Because the country
is developed at different stages in different areas, established markets
can prove the potential for expansion across the country. What may be needed
and sold in the larger cities will eventually be wanted in smaller centres
and rural communites.

As China develops economically from an agricultural country to a more
developed nation, we will see a trend of agricultural workers seeking better
paying jobs and higher standards of living in the cities. This will mean
a large availability of low-educated, low-trained, inexpense labour for
manufacturing operations. Also, the recent increase in western-educated
Chinese mean that there are available many capable managers, engineers
and technicans to help provide the traditional industrial work relationship.

Chinese Business Culture (The main characteristics of Business culture and
business manners in China):

--There are no known society that have not worked out a system for cultural
transmission across generations, so the culture we discuss about actually
is also the reflection of : *history of the country, *religion of the nation,
*tradition of the people, *and other habits and inertia in the society;

--Language as the window of the culture is very important: *There are
more than 10,000 known languages in the world, 3,000 of them are identified,
*there is social filter in between the language itself (grammar) and the
meaning / expressions of the language, to recognize the differences between
them is crucial, *some language is precision, some is imprecision, to recognize
the different characteristics of the languages are very important for understanding
correctly of the expressions and the metaphor behind the words;

--Behaviours and manners are the "door" of the culture: *they
reflect the culture more directly, and not easy to fake or pretend, *they
also tell about the level of education the person has, *how to interprete
them, and recognize the conflicts between them and language (if there is
) are important as well;

--Religion is a subtle element of the culture: *it's not equally important
to every culture, *to a culture which emphases the religion very much,
the most dangouse thing is to make mistake in this area, it can make you
fail the whole case without understanding what has happened, *do remember
that besides the main religion there are some other minor religions in
some part of country as well, don't think one country's market is homogenous
in this sense, -- What is business culture? *the business culture is the
ways of doing business, managing the task, negotiating with counterparts,
solving the problems so as to the ways of running the enterprises, arranging
the administrative affair inside the enterprises, and employer-employee-enterprise
relationship, etc.; *internally, the business culture is some what similar
as so called "enterprise culture"; *externally, the business
culture has something to do with the business envirounment in the market,
some shared common rules or sense in handling the business amoung different
firms, perhaps also some specific business manners, habits and traditions
which would be thought as very odd or senseless in other market (national
or regional) but very functional in this certain market;

--Why business culture is important? *business culture is not writen
business regulations nor laws but a kind of tacit knowledge and followed
by most of the participants of the market, it is invisible however crucial;
*knowing about the business culture of the host country and behaviour accordingly
are the key things for the foreign enterprises to operate and survive there;
*business culture influences managerial so as to business goals; *in different
cultures, there are different types of economy, e.g.USA has the "profit-driven
economy", and Japan has the "market share-driven economy",
*facing to the counterparts with different business goals, you can reach
different results through the negotiation, *try to make right/necessary
compromise in the negotiation is as important as you insisting your requirements
and conditions, *China has the "profit-driven economy";

--Respect the host country's culture and business culture is only one
side of the case, insist your own cultural identity is important as well:
*make your counterpart accepts your rules of game, then it will be so much
easier for you in a long run, *if you totally give up your way of handling
things and only try to follow your partners cultural habits, you would
end up with no room for yourselves at all, *it's obviously easy for a person
to win the game when the game is played in the rules which he is familar
with, *when the "international business" studies emphasis more
and more the importance of understanding the host country's business culture,
there is another dangourse arising--that is, people start to forget they
are also one side of the business cooperation, their own culture is also
supposed to be their counterpart taken into consideration.

2)Understanding of Chinese culture and business culture: --The uniqueness
of Chinese language: *Chinese speakers' share is 20% amoung the world population,
*Chinese language is one of the most difficult languages in the world'
*It is an ancient language which is really rich but complicated, thus there
are both advantages and disadvantages of this characteristic: disadvantage
is it's almost impossible for foreign business men to learn Chinese in
a short period, however the advantage is that because of this reason, nobody
in China expects foreinger who comes to do business to speak Chinese in
contacting nor negotiating, *although the business negotiation may in English,
when the Chinese counterparts speak English, they still will keep their
"Chinese(language)" way of thinking and expressing, *Chinese
is imprecision language, Chinese people rather like to discribe the thing
instead of giving a clear definition, *Chinese people have really difficulties
in saying "NO", even when they totally disagree with you, Chinese
people like to say something else instead of directly saying "NO",
this makes most of foreign business men feel really difficult and headache,
*positive expression or friendly smiling of Chinese people during the business
negotiation mean nothing but their politeness and serious (towards the
project), don't get wrong impression and think that you have the deal already;

--The Chinese way of behave in business: *First of all, Chinese people
are very polite, especially towards outsiders, like foreigners. So, in
this sense, you will meet most of people who are well educated and with
good manners. *Second, as we have mentioned before, that the politeness
doesn't mean much anything. *Third, it is very complicated pattern of Chinese
way of business behave, it's ambiguous. *Fourth, it is a rather slow process
and requires your pacient in going through it step by step , little by
little, and even have to take some pause during it. Those pauses may be
necessary, and if you try to speed it up, you may end up slower or even
fail. *Fifth, although it is a slow process in doing business in China,
Chinese people are likely to not only start a idea, but also finish the
project. They are easy going people, but they do pursue their goals. So,
don't give up in the middle, don't think that anyway there won't be any
result in the end. Do you know that in the Chinese old sayings, there are
lots of prases teaching people to fininsh the things they have started
already? I mean that there have been moral lessons in this area for thousands
of years, it has become people's way of behaving naturally. *Sixth, although
it's complicated system, it is possible to somehow understand and interprete
the really meaning behind the behaviours.

# For example, Shaking hand is one of the most important moment for
you to understand your Chinese partner's attitude towards you and the project.
When they shake your hand tightly and strongly, it shows that they really
want to cooperate with you, and they really hope to get something out from
the project, and they are appreciate the partnership, they have had some
trust and confidence on you already. But if they just offer their hands
for a short second, and shake your hand symbolicly, you may have to do
a lot in order to set up the trust between you and your partners, or perhaps,
they are not very sure about the project itself either, they haven't take
it as an on going project seriously, they just try little bit and see how
it will look like. How to make your project to be attractive is very important
in this stage.

Some other body language are ought to be concerned as well, such as
how do they sit and how do they change their sitting position during the
business meeting, where do their eyes look at when they are listening your
speech or talking to you, where do they put their hands and arms, and are
they sleepy or do they sweat! And also, try to observe their behaviours
outside of the business meeting room.

Chinese people's personal space (distance) is somewhat closer or shorter
than the European's since traditionally it has been a nation with closed
family and social structure, and shares more amoung each other. Also because
of the population density, Chinese people are used to stay close to each
other.

--The religion's role in China and Chinese business life: *Buddhism
is the main religion in China, however it has been applied practically,
it is definitely different from the buddhism in India for example; *There
are one majority and 55 minorities in China, they don't believe the same
"God" naturally; *amoung the Han Chinese, Buddhism is the most
popular religion, *Daoism is another popular belief in China, Han people
and some other minorities believe it, *Tibeten Buddhism is one branch of
buddhism, but during the history, it has developed in a rather different
way, so the content and principle of the Tibeten Buddhism is very different
from the buddhism in the central China, to mix them is dangourse, *the
areas in China which have most of the foreign investments are mainly the
place where Han people live, so the buddhism is the dominant religion there,
in general, people in Southern China are more religion orientated than
the people in north, --Besides religion, there are some other common secular
believes among Chinese population: *people believe in fortune and luck,
so they have created some symbolic signals for fortune or unfortune, and
they do really follow them! # For example, numbers' symbolic meanings:
4, 13 and normally the odd numbers are the unfavourable ones, and 6, 8,
10 and other even numbers are the signals of luck and fortune. Don't ignor
the importance of these numbers, they are very "active" actors
in Chinese business life. The new shops and restaurants are openned on
the 6th or the 8th of the month, the telephone number of the boss and the
car registration plate's number should be 888 or 666 and definitely not
444, since the pronounciations of 4 is similar to "die", but
8's pronounciation is similar to "developing, explosion and successful",
and 6's pronounciation is similar to "smoothly or without a hitch".
Chinese people think these numbers have potential power in influencing
their fortune in business careers. Indeed, this is quite interesting phenomenon.
In the one hand, due to science and techonology, technique's development
over time, people know more about the reality of the world. More and more
people shift from the loyal belivers to the unseriouse belivers, or perhaps
they are just keeping some kind of tradition of the families or the habit
of ritual ceremony in their everyday lives. In the other hand, since the
uncertainty of the future life, the sharp differentiation amoung persons
during the economic transition period which has showed to people that some
how somebody can just become millionar over night, at the same time somebody
else failed and lost all his money, home even life, people have become
heavily believe in some kind of super power which can control human being's
life in a invisible way from above. It seems not very important to Chinese
that is there really a God or Buddha there, however people are willing
to follow some kind of fortune rules, and just for make themselves feel
better or let's say, more sure, more certain when they are doing business.
If you ask them that do they really think that it matters if it's 4 or
8, they probably would answer you, "Well, who knows! Of course they
are just two different numbers, maybe they mean nothing. But, why not just
believe the old saying and common sense, any way it's not a big deal to
get a telephone number with 6, 8 instead of 4, or open the factory on 16th
of the month. At least, it won't do harm on you, it will bring the fortune
or not only the God knows! But if you didn't follow the rules, and you
meet some difficulties in the future, you would be very very regret then."

Isn't it really not a big deal? Actually, people pays thousands of yuan
(Chinese currency, 1 $~8.5 yuan) just for getting the special number on
their car plates or 8888 yuan for one bottle of X.O. in their business
dinner in the restaurant. And, if as the business partners of Chinese business
men, you don't know all these "little" things, you may do something
which is considered to be very bad to them without even notice at all,
more over, you may even lose the deal! So, you can see, in any sense, it
is a big deal, take it seriously! It will be very helpful in your practical
operation in China.

Some other little things I want to mention here. Do remember that instead
of giving flowers in odd number to your Chinese friend, please give flowers
in even number. This is just opposite to the common European tradition.
So it's a easy mistake to make. Chinese people don't like odd number at
all, they think that "good things should come together".

Never give Chinese people watch (especially clock) as gift (especially
birthday gift). The pronounciation of the clock is similar to the "end
or finish", and "give clock" is similar to "send someone
to the end of his life". Nobody likes to die, naturally.

There are lots of this kind of tricks in the daily life in China. Before
you go to China and start your business, besides all the project research
and business oppotunity investigation, please try to make a clear list
of these cultural "taboo", and bring with you in your portfolio.
To work with a nation which is rather "fortune orientated" than
obsolutely rational, you may very possible fail for some minor elements.

WASHINGTON - WHERE there is a need, there's usually an opportunity.
Nowhere is this more dramatically evident than in the environmental challenge
facing the developing world, where close to 5 billion of the world's 5.6
billion people now live.

With the world expected to add close to 100 million people a year for
at least the next 25 years, with almost all of that added population living
in developing countries, there's the potential for enormous environmental
problems.

``My conviction is that it is a doomed case to achieve sustainable development
and a decent life for the masses of people on this planet if we cannot
limit the present population growth,'' says Percy Barnevik, chief executive
officer of ABB Asea Brown Boveri, the giant Swedish-Swiss engineering company.

Yet as a report issued by Population Action International, a Washington-based
non-governmental organization, warned this past weekend, fiscal pressures
in the rich industrial countries mean family planning and other population
activities are badly underfunded.

Canada is among the countries that have cut back on population programs
due to deficit reduction policies at home.

Barnevik, who was participating in a World Bank-International Monetary
Fund conference, said that with population growth, there is also an immense
migration into Third World cities.

``You see mega-cities looming in the developing world. Cities designed
for one or two million people are now approaching 10, 15, 25 million, with
congestion, pollution, mountains of waste and lack of drinkable water and
electric power.''

And as Barnevik said, people in the developing countries want to raise
their living standards five or 10 times, and this is no longer a dream.

China, for example, has been growing at about 9.5 per cent a year since
1979.

``We now have in China about 250 million people moving in some coastal
and river clusters, just like Hong Kong started 50 years ago,'' Barnevik
said, adding, ``Some 180 million Indians are similarly on the move and
this number could double over the next 15 to 20 years.''

The big question is how will these countries respond to these enormous
relocations of people.

Will they increase the coal they burn 10 times, using old and polluting
technologies? Or will they use the more efficient and much cleaner coal-burning
technologies?

Will their industries be wasteful and accumulate dangerous or toxic
wastes, polluting the air and water around them?

And, as Barnevik asked, ``will there eventually be 300 to 400 million
cars in China and will the cities be choked by diesel trucks and buses?''

Or, alternatively, ``will they adapt their infrastructure in time and
have the best available technologies with dramatically lower impact on
the environment? Will they build alternative clean and efficient mass transport?''

These are crucial issues as we move into the next century.

Indeed, the greatest challenge facing society in the next century will
be to reconcile the legitimate desire of the billions of people in the
developing world for a better life with the carrying capacity of the planet.

In part this will depend on population and anti-poverty programs to
reduce population growth rates, which means countries such as Canada have
to be prepared to support United Nations agencies such as the U.N. Population
Fund and the World Bank in their population, health and education programs.

It is often argued, with some legitimacy, that today's generations should
not leave a burden of debt for the next generation, which is one reason
for dealing with budget deficits now.

But more important, today's generations should not leave future generations
with a threatened planet because they failed to make the necessary investments
today.

Likewise, we have to, today, invest in the research to develop new and
better technologies for sustainable development and explore ways to transfer
that technology to the developing world.

It is here that need leads to opportunity since development of important
technologies can also create jobs for Canadians and growth for Canadian
companies.

If we want a better world, we have to invest today to make it happen.
But if we invest wisely, we will create opportunity for ourselves as well.
Which means our politicians have to learn to think about the long-term
future as well as the next election.